A negligence claim under the Limitation Act 1953 accrues when damage occurs, and if not filed within six years from that date, the claim becomes time barred.

Lee Heng Cheong JCA:

Introduction

[1] This is an appeal by the Appellants/Defendants against the Penang High Court's decision dated 25 June 2019 which allowed the Plaintiffs/Respondents' claim and ordered that the Appellants/Defendants pay the Respondents/Plaintiffs, the sum of RM1,500,000.00 with an interest rate of 5% per annum on the sum of RM1,500,000.00 calculated from 27 May 2015 until full settlement; and cost of RM100,000.00.

[2] The Respondents/Plaintiffs filed a legal action on 28 July 2015 against the Appellants/Defendants for professional negligence and negligent misstatement. On 25 June 2019 the Learned High Court Judge allowed the Respondents/Plaintiffs' claim. The Appellants/Defendants then filed the present appeal.

[3] For ease of reference, the parties herein will be referred to as they were in the proceedings before the High Court.

[4] We heard the appeal and after due deliberation and having carefully considered the submissions of both parties, we found that there are merits in the appeal and unanimously allowed the appeal with costs. This judgment explains why we allowed the appeal.

The Salient Facts

[5] The Plaintiffs executed a Sales and Purchase Agreement dated 22 April 2004 ("SPA"), to purchase a piece of land described as Plot 32 at Krystal Garden ('the said Property') from Reka Mesra Sdn. Bhd. ("the Developer") and also a Construction Agreement bearing the same date, for the construction of building a house on the said Property. There is no dispute or issue with the Construction Agreement. What is in dispute before us, is the SPA.

[6] The SPA was printed by the Developer, executed by the Plaintiffs on 6 April 2004 and forwarded to the Defendants for stamping on 22 April 2004. At that material time, the Defendants did not conduct a land search of the said Property and the SPA did not state that the said Property was charged to any Bank as the column for "name of bank/financier" in the SPA was left blank.

[7] The Plaintiffs paid the final purchase price of the said Property to the Developer on 26 May 2004.

[8] On 2 September 2014, the Plaintiffs received a letter from Bank Islam Bhd, who is the chargee of the said Property, demanding the Plaintiffs to pay the redemption sum of RM900,000.00 in order to redeem the said Property.

[9] Hence the Plaintiffs initiated the present action against the Defendants.

Findings Of The High Court

[10] The learned High Court Judge inter alia held that the Defendants owed a duty of care to the Plaintiffs, as their solicitors and that the Defendants were negligent, based on the conduct of parties in the transaction. The learned High Court Judge also identified 3 main breaches of duty of care by the Defendants which are as follows, firstly, in the preparation of the SPA, secondly, in the failure to conduct a land search and thirdly, in the deliberate cover up of negligence for many years.

[11] The learned High Court Judge granted judgment in favour of the Plaintiffs and ordered the Defendants to pay damages to the Plaintiffs.

The Defendant'S Contentions Before This Court

[12] The Defendants contended that the learned High Court Judge had erred in law and in fact in allowing the Plaintiffs' claim based on the following:-

(i) The learned High Court Judge had erred in law and in fact in completely failing to consider and address the Defendants' defence that the Plaintiffs' claim is time barred by s 6 of the Limitation Act 1953 ;

(ii) The learned High Court Judge had erred in law and in fact in failing to determine that the Defendants were actually acting as the Developer's solicitor instead of the Plaintiffs' solicitor and therefore, the Defendants owe no duty of care to the Plaintiffs;

(iii) The learned High Court Judge had erred in law and in fact in failing to consider the three-fold test provided in the Federal Court case of Pushpaleela R Selvarajah & Anor v. Rajamani Meyappa Chettiar And Other Appeals, 2019 MarsdenLR 2312 when deciding whether the Defendants owe a duty of care to t